Correlation Between Simon Property and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Simon Property and Cumberland Pharmaceuticals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Simon Property and Cumberland Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Simon Property and Cumberland Pharmaceuticals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Simon Property with a short position of Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Cumberland Pharmaceuticals.
Diversification Opportunities for Simon Property and Cumberland Pharmaceuticals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simon and Cumberland is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals and Simon Property is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Simon Property Group are associated (or correlated) with Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Simon Property i.e., Simon Property and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Simon Property and Cumberland Pharmaceuticals
Considering the 90-day investment horizon Simon Property is expected to generate 23.97 times less return on investment than Cumberland Pharmaceuticals. But when comparing it to its historical volatility, Simon Property Group is 18.43 times less risky than Cumberland Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. Cumberland Pharmaceuticals is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Cumberland Pharmaceuticals on November 29, 2024 and sell it today you would earn a total of 283.00 from holding Cumberland Pharmaceuticals or generate 119.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Simon Property Group |
| Cumberland Pharmaceuticals |
Simon Property and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Cumberland Pharmaceuticals
The main advantage of trading using opposite Simon Property and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Cumberland Pharmaceuticals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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